New home launches drop 19.46 per in top 8 cities; housing prices fall marginally, says PropEquity

New home launches drop 19.46 per in top 8 cities; housing prices fall marginally, says PropEquity

Unsold inventory in major 8 cities also registered a drop of 3.12 per cent to 4,71,855 units from 4,87,043 units on the back of lower new launches and developers focussing on clearing their existing unsold inventories.

Unsold inventory in major 8 cities also registered a drop of 3.12 per cent to 4,71,855 units from 4,87,043 units on the back of lower new launches and developers focussing on clearing their existing unsold inventories.

Home launches dropped 19.46 per cent in top 8 cities from 28,428 units to 22,897 during the January-March quarter of 2017 as impact of demonetisation on the real estate sector tapered down faster than the expectations, according to a report by PropEquity Research. The top 8 cities included Gurgaon, Noida, Mumbai, Kolkata, Pune, Hyderabad, Bengaluru and Chennai. The report further said that unsold inventory also registered a drop of 3.12 per cent to 4,71,855 units from 4,87,043 units on the back of lower new launches and developers focussing on clearing their existing unsold inventories.

Among the top 8 cities, Noida saw a jump in new launches as it increased by 100 per cent to 216 units, which was from a smaller base, but indicating overall positive sentiments to launch new projects. Noida also saw unsold inventory falling by 2.4 per cent to 26,919 units as developers rush to clear old stock.

The real estate sector in India is going through a transformation and is expected to move in a positive direction on the back of RERA, granting of indurty status to affordable housing and recent RBI’s move to allow banks to invest in Real Estate Investment Trusts (REITs). Delay in home deliveries may also go down as developers are working towards completing their previously launches projects.

“Real estate sector in India, especially housing is going through a critical transition phase post demonetization as transaction activity has slowed down. Many buyers, sellers, banks and private equity investors are waiting for the sector to tide over the volatility in the market. With the implementation of RERA, we foresee delays in project deliveries to go down as developers rush to complete previously launched projects to avoid penalties. We strongly believe that developers with good track record, strong financials and low leverage to external debt are expected to perform better in the current environment ” Samir Jasuja, founder and CEO at PropEquity said.

Housing demand (absorption) across key cities stayed almost muted and fell by just 1.2 per cent at 28,131 units from 28,472 units, while housing prices fell marginally by 1.67 per cent to Rs 6,185 per sq ft from Rs 6,290 per sq ft as developers were able to finally sell their earlier inventory and focussed on delivering earlier projects before Real Estate Regulator Act kicks in later this year.

Gurgaon registered a fall of 0.7 per cent in new launches with 152 units, while absorption declined by 8.5 per cent at just 931 units indicating a strong focus by Gurgaon developers to clear earlier stock. Housing prices in the city fell by 1.7 per cent Rs 5,476 per sq ft.

According to the report, Mumbai remained negative on all parameters – new launches, absorption and prices falling. However, unsold stock fell by 0.9 per cent suggesting the macro trend to clear old inventories in this region as well. Kolkata saw a significant jump (53.9%) in new launches as developers anticipating demand in the coming quarters launched 3,801 units. However, absorption remained under stress for Q1, declining by 3.8% due to weak end-users demand. Unsold stock in overall Kolkata has reduced minutely (0.5%) to 44,487 units. Prices fell by 1.5 per cent at Rs 3,707 per sq ft.

Another major city, Kolkata saw a significant jump (53.9%) in new launches at 3,801 units. However, absorption remained under stress and declined by 3.8 per cent due to weak end-users demand. Unnsold stock in overall Kolkata reduced minutely (0.5%) to 44,487 units. Prices fell by 1.5 per cent at Rs 3,707 per sq ft.